PenFed Has Stopped Accepting Payment Saver Auto Loan Applications

What’s the play on a balloon at 3.84% vs a DCU at 1.24%? Don’t you still have to pay the full sales tax?
TIA

In NJ, there is no sales tax on EVs, but you are paying full sales tax on a conventional loan as well. There is a tax benefit of leasing, in most states, so the balloon loan makes sense where the captive lease MF is higher then 3.84%, or where the captive has restrictive policies for lease disposition. Both of these are true when considering Tesla financing.

ah! makes sense. thx

Probably going to get another EV in a few months, depending on what out there and if their leases don’t pass through the Fed credit… may consider these CU balloon payment programs.

Although when we ran the numbers on the Ford Options plan, it was about as high if not higher than the lease payment.

Planning to buy a Tesla for a short period of time roughly around 8 months, should I go for conventional loan or balloon payment? I’m in NJ so no sales tax on ev, leaning more towards balloon because of low monthly payment. Any advise?

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The cheapest financing is gonna be the DCU program at 1.29% for 65 months, but it certainly won’t result in the most friendly monthly payment. But if you are laser focused on the cheapest out, this is the clear best option in the market right. You will pay very little interest over your short term.

If instead you want to minimize your monthly payment, either a balloon loan or a long term conventional loan will achieve similar objectives for short term ownership. I used a balloon loan on both my Model S and my Model 3. My general approach is to go with a 24 month term and then try to put enough down to bring the loan balance right around the RV. This will result in a very small monthly payment, as you are only basically paying the debt service, for as many months as you plan on keeping it.

You can find alot of good discussion on balloon loans, and other options, in our Tesla discord. See;

You risk losing that large down payment in case of an accident tho, correct ?

Huh? You are still financing the vehicle, not leasing.

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True, I get that. I’m trying to understand that if the upfront cap cost (or down payment) will be made whole by the insurance in normal depreciating times. You risk losing more of that large down payment if you chase a lower payment on the ballon loan. Correct ?

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There is some risk, because the car can depreciate while you are not paying off any remaining balance. If you wrecked the car, the market value may not result in an insurance payoff large enough to get your entire down payment back. I do always carry GAP insurance to mitigate this risk.

However in today’s secondary markets, where some cars are worth more used then new, or where the vehicle holds it’s value very well, this risk level is pretty low. Tesla falls into both these categories right now.

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bump just to highlight that you can join cap ed CU

https://capedcu.com/loans/index.html

$20 to join and you have access to the payment saver loan products.

cheers!

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Can you post the rate for how many months? I cant find anything

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id like to see the rates too!

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should be similar to these guys, they all use the same AFG calculator

https://secure.autofinancialgroup.com/AFG/index.jsp?CUID=271186423&m

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It’s usually 1% higher then the standard conventional loan rate.

CapEd was my #1 recommendation earlier in this thread. See; PenFed Has Stopped Accepting Payment Saver Auto Loan Applications - #40 by z0lt3c

My only issue is that they use transunion for credit scores.

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Any recs for CUs with walk-away options?

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Non-withstanding the fact it’s a terrible idea, you can add the vehicle return addendum to any AFG contract.

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make sure you’re buying something that retains its value otherwise it’s a bad proposition…

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I know old topic, was just about to do another when I saw no longer possible. I did these for the last 10 years if not longer. they were a great option. You buy car through dealer like full purchase. Penfed holds the residual and converts to fixed loan at end if you want or trade in.

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Can you use this program but put the car in a business name?